Nine sale looking more likely

It is understood lawyers acting for Goldman Sachs wrote to the Nine board, including chief executive David Gyngell.
Photo: Andrew Quilty

by
Nabila Ahmed | Ben Holgate

Nine Entertainment Co appears headed for the auction block next week after mezzanine lenders Goldman Sachs indicated a deal with hedge fund senior lenders would be difficult to strike within a week.

Nine chairman Peter Bush warned lenders this week the company would be put up for sale if they could not agree on the $3.3 billion restructure of the media group by mid next week. In its response, revealed by The Australian Financial Review online on Wednesday, Goldman warned Nine directors they could be personally liable if the Wall Street giant was not treated fairly in negotiations over the restructure.

With Nine needing to refinance or repay $2.3 billion in senior debt by February, it is understood Goldman does not believe the sale timetable is realistic and has indicated to the directors that running an auction now, with limited time and great uncertainty over its debt, is not in the best interests of the company.

It is understood lawyers acting for Goldman wrote to the Nine board, including chairman Peter Bush, chief executive
David Gyngell
and outgoing CVC Asia Pacific Australian chief
Adrian MacKenzie
, this week.

The letter from Freehills partner John Nestel reminds the directors of their personal responsibilities in the event negotiations over Nine’s restructure break down.

The letter is a clear sign that negotiations between Nine’s senior and second-tier lenders are becoming more aggressive and personal.

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A spokesman for Goldman yesterday said: “Goldman Sachs Mezzanine Partners continue to believe that a consensual solution is in the best interests of all Nine stakeholders and we continue to pursue this route. We have a fiduciary duty to our investors and we are focused on preserving their value."

NEGOTIATIONS GETTING PERSONAL

Goldman’s legal letter, penned by Goldman’s advisers at Freehills and addressed to Mr Bush, Mr Gyngell and its two directors representing owners CVC Asia Pacific, Mr MacKenzie and Andrew Cummins, is an attempt at creating extra pressure on the board, which is asking for a speedy and orderly restructure of the company’s $3.8 billion loans.

cHAIRMAN THREATENS NINE SALE

In a letter sent to the Moelis & Co-advised hedge fund senior lenders Oaktree Capital and Apollo Global Management and mezzanine debt holders led by Goldman Sachs late on Wednesday, Mr Bush said he wanted the best outcome for the company.